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OECD workshop
Paris, 5 April 2018
Godwin Mifsud
Chair of the EPC-Ageing Working Group
1
Outline of the presentation
3
The Ageing Reports
economic & budgetary
long-term projections for
the EU, including public
expenditure on pensions,
health care, long-term
care, education and
unemployment
published every three
years
jointly by the European
Commission and the
Economic Policy
Committee 4
and next… the 2018 Ageing Report
A new set of expenditure
projections for EU 28
Member States
Publication in May 2018
Projection horizon
extended to 2070
Further details on
underlying assumptions
and projection
methodologies available
since November 2017
5
The 2015 Ageing Report:
health care expenditure projection
model structure
Sources of AWG macroeconomic
Eurostat Member States
data: assumptions
↓ ↓ ↓
6
Demographic drivers of expenditure
9
the latest 2018 update…
10
Source: Eurostat 2015-based population projections
Non-demographic drivers of health
care expenditure
Technological
progress
As countries
become richer,
they are likely
to spend more
on health care
and long-term
care Health care is
labour-intensive:
likely to become
relatively more
expensive
(Baumol disease)
over time
11
Health Care Scenarios
12
Coping with health care spending trends remains a major
challenge (change in pps. of GDP, 2013-60)
10.0
10.0
9.5
Health expenditure in % of GDP
EU 28 9.5
4.5 4.5
4.0 4.0
3.5 EU
3.5
in % of GDP
in % of GDP
3.0
3.0
2.5
2.5
2.0
2.0
1.5
2013 2020 2030 2040 2050 2060
1.5
Cost and coverage convergence scenario Coverage convergence scenario
Cost convergence scenario Shift to formal care scenario
2013 2020 2030 2040 2050 2060
High life expectancy scenario Base case scenario
Demographic scenario Constant disability scenario
AWG reference AWG risk
2. Policy challenges and options
18
Addressing health care
as a policy priority
Policy Challenges
Containing costs
on hospital and pharmaceutical care
Union action shall respect the responsibilities of the Member States for
the definition of their health policy and for the organization and
delivery of health services and medical care. The responsibilities of the
Member States shall include the management of health services and
medical care and the allocation of the resources assigned to them.
This includes:
1. improving the financing mix;
2. benefits packages need to be based on cost-effectiveness criteria
and cost-sharing schemes should support the containment of
public spending, while preserving access;
3. moving away from hospital-centric models;
4. strengthening the cost-effective use and the affordability of
medicines.
Council conclusions
Publications:
'Ageing Report 2018 – Underlying assumptions and projection
methodologies'
https://ec.europa.eu/info/sites/info/files/economy-finance/ip065_en.pdf
'Joint Report on Health Care and Long-term Care systems & Fiscal
Sustainability'
https://ec.europa.eu/info/publications/economy-finance/joint-report-health-care-and-long-term-care-
systems-fiscal-sustainability-0_en